Introduction
There is now some consensus among oil market participants that the long-held assumption of a correlation of oil price to Middle East regional risk is broken. Since October 7, 2023, we have seen a consistent escalation in conflict, including an increase in the number of state and non-state actors engaged in the Israel-Gaza war, yet oil prices have remained in the range of $70 to $90 per barrel of Brent crude (with highs in October 2023 and after the April 2024 Iranian attack on Israel). However, high prices after a slight spike were never sustained and even quickly flattened during tense points of kinetic activity…
